· David Senra, Alexander Taubman
[00:00:00] S0: ... because I want to hear about that, Danaher, which you and I have talked about before, but also the other people that you guys look up to and you emulate. But you go to business school. [00:00:00] S1: So I went to business school. I ended up interning. I'm just going chronological order, but I ended up interning at a holding company called Leucadia. So I was interested in holding companies, and then I spent some time hanging out with Josh at Thrive. So basically, I was always interested in technology and holding companies dating back 15 years. None of this clicked for me until much later. So I went to Oaktree after business school. I graduated, I decided I wanted to stick with investing, and partnered with the guy I mentioned, Patrick, and we worked directly with Howard Marks and Bruce Karsh, two legends of the investment world, to build kind of some new businesses for them. We had started Oaktree's first equity business. We ended up getting involved in some of their credit businesses and helping out with a few things and doing... We started several different products there and worked very closely with Howard and Bruce and just had a tremendous amount of fun, learned a lot from them. But the whole time, I knew I was not sort of fully expressing myself. I eventually wanted to start something, but I didn't know what it was. [00:00:00] S0: On your own. [00:00:00] S1: Yeah. [00:00:00] S0: As a founder, even if it was going to be a fund or an investment company.
· David Senra, Alexander Taubman
[00:00:00] S0: As a founder, even if it was going to be a fund or an investment company. [00:00:00] S1: Yeah, I think I just knew I wanted to do something entrepreneurial. I wanted to build something, and I wanted to do something on my own. But I didn't really know what it was. But then when I started really thinking, after I was at Oaktree for almost 10 years, I started really thinking and brainstorming with some of the early co-founders of Long Lake, who we've talked about, and the ChatGPT moment came out, and it just became very obvious to me, like this was the thing. [00:00:00] S0: But wait, where was the Taubman Capital? When did that happen in your life? [00:00:00] S1: Yeah, so when I was at Oaktree, I mentioned my dad and and grandfather's business, and I was helping working with our family to build out Taubman Capital, which is our kind of family investment business, which was all our own money. And we ended up partnering with... We did a bunch of these deals with investments in founder-owned companies, and we did, I think, close to 50 of them over that decade. [00:00:00] S0: So that's where you learned how to buy companies, do you think? [00:00:00] S1: Yeah, it was a combination of stuff I learned at Oaktree and stuff I was doing with Taubman Capital. And Oaktree stuff was generally larger companies, public companies. [00:00:00] S0: Yeah, but the returns you had at Taubman Capital, you don't like talking about this, but I'll just say it, and we can cut it if you're embarrassed, but it was like something like 70% IR or some shit like that, correct?
· Alexander Taubman
[00:00:00] S1: We had a very good run. We had a very good run. But yeah, it was an eye-opening experience for me because what I realized is we there's some remarkable businesses out there. And just because something is a small or mid-sized business doesn't mean it's a bad business. Actually, I mentioned that business in Minnesota we partner with that's been building all most of the schools in the entire state for the last like 70 years. It's an amazing business. And so my learning was there's some unbelievable entrepreneurs. Going back to my roots in Michigan, it really resonated with me to be able to partner with some of these folks and help them grow their companies. And so to your point, we had a very successful run in bringing sort of permanent flexible capital, which was our own internal balance sheet, a long-term horizon, being comfortable in it, not just comfortable, very encouraging of investing in growth. We're not focused on short-term quarterly earnings. We're not over-levering the companies like a lot of private equity funds do. We basically are a long-term growth investor in great American businesses, partner with great founders, and we can bring them things that they may not have. Like, for us, it was helping them get growth resources, helping them get M&A resources, helping them have capital. A lot of folks have built an amazing business, but they've never done an acquisition before. And they may have tons of competitors that they could run the business better than, and we can help them go and consolidate that industry and become a bigger scale player and get the sort of industrial logic of that. And so we had a lot of fun. That was sort of nights and weekends for me over the 10 years when I was working at Oaktree. So that was a very formative experience as well. Longlake, it all clicked. It turns out I was always passionate about partnering with founders. I was always passionate about technology.
· David Senra, Alexander Taubman
[00:00:00] S0: Passionate about capital allocation. [00:00:00] S1: Yeah. [00:00:00] S0: And then now you met the right people where you could actually build a unique partnership that very few people can match. [00:00:00] S1: Yeah, exactly. I got very lucky. Super grateful to have incredible early investors. I think they've really pushed our thinking and level of ambition. And obviously our mutual friend Rick, who's an extraordinary investor and been one of our biggest partners, and Hemant at General Catalyst and Mark, and it's an amazing group of people, Elad Gil, and they basically really pushed my thinking in a big way since the beginning. [00:00:00] S0: What Rick tells me about you is that you're unusually receptive to both new ideas and criticism. And a lot of founders obviously are more like kind of headstrong and less... Usually they'll listen, but they're running the ship, you know? [00:00:00] S1: Well, that's nice of him to say. I think feedback's a gift. We want to get better every day, just like we want our companies to get better every day, we want our team to get better every day. I want to get better every day, and I have a tremendous amount to learn. That's why I love your podcast, actually. I learn more from you probably than from almost anyone from your episodes. And that's why I make everybody... I actually do. It's a true thing. [00:00:00] S0: I know this is- [00:00:00] S1: Longlake onboarding includes like half a dozen of your episodes.
· Alexander Taubman, David Senra
[00:00:00] S1: Longlake onboarding includes like half a dozen of your episodes. [00:00:00] S0: That's just smart. Okay, so I know you were working on a few deals. You and Zach were working on a few deals together before you found Longlake. [00:00:00] S1: Mm-hmm. [00:00:00] S0: You guys are talking about this thesis for what, six months, a year? Like, how long does it actually take to... And then we got to talk about the fucking crazy growth that you've had in the last three years. [00:00:00] S1: Yeah. So yeah, Zach and I, we go way back. We started at Goldman, as I mentioned, and we'd stayed friends a long time. And he's done some amazing things in technology, brought me into some of those things. [00:00:00] S0: That's an understatement. [00:00:00] S1: And then he was very inspiring on that. And then he was coming into some of our Taubman Capital deals and buying. We did a funny thing where we ended up like, we built one of the largest go-kart track companies in America. We partnered with 20 different locally owned go-kart tracks and created a platform. And so Zach invested in that deal with us. And we realized there's some really great businesses out there that people don't spend a lot of time thinking about. And what if we could bring the world-class technology expertise of some of the companies like Ramp and Cognition and the labs, and you could bring some of that type of world-class AI team to the Main Street American businesses and enterprises? And that was the idea. [00:00:00] S0: Was it that idea from the very beginning?
· David Senra, Alexander Taubman
[00:00:00] S0: Was it that idea from the very beginning? [00:00:00] S1: It was that idea from the very beginning. [00:00:00] S0: So from that, the conversation you guys start having about this to, "Shit, we're going to start the company," to it's founded is, what's the timeframe there? [00:00:00] S1: I think it was like nine months from the first conversation until we actually incorporated the company. I was still at Oaktree at the time, so we were spending a lot of time thinking about it, meeting some of the early engineers who ended up joining us. And I think the thing that got me really excited was when I started to talk about this idea with engineers, there was a lot of palpable excitement. People were really excited to work on the project. I knew we could build an extraordinary team. Being able to build the right team at the right time to go and do this was a unique opportunity. I was very bullish on the company and very excited, but I think we just continue to get more and more excited about what's ahead. Our bar for what we want to build and what we want to do keeps going up every day. [00:00:00] S0: Dude, I've been there from like, I think day one. But this is like, when I heard about the Amex deal, I'm like, "Why am I not thinking?" Like, I know these are my friends. I'm not even thinking, like I didn't even think it was a possibility that you would do a $6 billion acquisition. I was like, "Damn, these guys are really good."